Coach, Inc. Stock Analysis Coach, Inc. -- Business Plan

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Coach, Inc. Stock Analysis

Coach, Inc. -- Stock Pick

Coach, Inc. (NYSE:COH) is a solid, long-term investment. The company produces high-end, luxury fashion and lifestyle accessories such as handbags, sunglasses, scarves, jewelry, shoes and other items. The brand is especially popular in the United States and Japan. Coach has a unique competitive advantage due to its 70-year legacy, name recognition, loyal customer base, and international appeal. The product line always emphasizes high end leathers, product detailing and finishes at affordable price points. Handbags are the company's flagship offering. Competitors include Kenneth Cole, Louis Vuitton, Dooney and Burke, Gucci, Fendi, and Prada. Each company carries handbags that offer comparable quality, but at prices well over $1,000. Coach targets an equally affluent and brand conscious demographic; however, the company is best known for "affordable luxury" with price points beginning at $300. This pricing strategy has proven to be a competitive advantage, particularly in the current recession.

Coach sells its product line through its own retail outlets and in higher end department stores. The primary customer base for its line of signature products is the middle to upper-middle class. Merchandise from past seasons is liquidated through factory outlet stores throughout the country and abroad which allows the company to capture the lower end of its target market. The company has a loyal following which makes it a solid investment. In addition, merchandising teams employ a customer-centric approach in designing products that is based upon consumer research and a solid understanding of the customer base.

Despite the recession, the multi-tiered pricing strategy (rare in the luxury market) and emphasis on quality and value, has helped Coach, Inc. weather the storm. The company's balance sheet shows little to no debt allowing it to finance operations without relying on creditors. A strong cash advantage over competitors is an asset -- another reason why I view it as a stable investment poised for continued growth as the economy improves. I would anticipate an increase in stock values as Coach's earning improve.

CURRENT STOCK PRICE: 57.75

+0.15(0.26%)

After Hours: 57.750.00(0.00%)

Nov 6, 4:57PM EST

Currency in USD

Range

57.01-57.81

52-week

48.24-79.70

Open

57.69

Vol / Avg.

2.82M/5.03M

Mkt cap

16.39B

P/E

16.17

Div/yield

0.30/2.08

EPS

3.57

Shares

Beta

1.60

Inst. own

96%

Reference

(2012, October 24). Stocks in the News. Wall Street Journal - Eastern Edition. p. C4.

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